The European Commission issued its recent economic forecastlast week which states that Malta’s Growth Domestic Product (GDP) is expected to strengthen further and reduce inflation in 2023.
Last year, it was believed that the real GDP hit 6.6%, reaching a greater percentage than was forecasted; subsequent to a successful fast-paced recovery plan following the pandemic. Malta’s economic future is well stabilized and it is now expected to grow at a slower rate in 2023, yet, resulting to be higher than most EU countries that placed Malta in second place after Ireland.
The tourism sector made a good comeback last year, reaching pre-pandemic levels. Domestic demand has also been on the rise, aiding the overall GDP growth with strong support from net exports. "In 2023, real GDP is forecast to grow at a slow pace at 3.1% following a wider economic slowdown in Malta's main trading partners," reported the EU commission. It is also predicting that with the aid of both net exports and domestic growth as aforementioned, Malta’s real GDP growth will reach 3.7% in 2023.
In 2022, the Maltese government and authorities declared that they are set to absorb most of the new energy prices to limit energy inflation in 2023. The energy costs in 2022 were kept at the 2020 level, making it a 6.1% HCP inflation rate, higher than was projected despite the costs’ absorption. In 2023 Malta is heading to a stable 4.3% and expected to subsidize to 2.4% in 2024, as the importation prices are expected to moderate in the coming year.
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